FPIs ship-out, as below expected results disappoint

Foreign Portfolio Investors (FPIs) became net sellers in the Indian equities market for the week ended Feb 13, following global uncertainty and slow pace of domestic reforms which dented sentiments.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.

The FPIs went on a selling spree by shedding-off shares worth $387.35 million.

For the week ended Feb 13, the FPIs massively sold stocks worth Rs.2,186.68 crore or $387.35 million, according to data with the National Securities Depository Limited (NSDL).

The FPIs had only off-loaded scrip worth $108.24 million or Rs.793.95 crore in the previous week ended Feb 6.

“Choppy markets lead by huge up and down swings intraday moves. Such is the case that one can get cut both ways long or short across the sectors,” said Gaurang Shah, vice president, Geojit BNP Paribas.

“Results have been disappointing over the last one week as most companies reported below expectation numbers for the third quarter,” Shah added.

According to Shah, banking sector was the main culprit in the last seven days of downward movement with a huge sell-off in bank index and banking stocks.

Even the out come of Delhi election results shocked not only the Congress, the BJP, but even the FPIs, which saw it as a downgrade in voter confidence on the BJP-led government in the centre.

Other analysts predicted that going ahead, FIIs may stage a come back on account of a pre-budget rally, whose expectations have started to build up.

FPIs were also anxious about the resolution on Greek front. However, their concerns eased over Greece, as the country reached an agreement with its euro zone counterparts to solve the current debt crisis.

Selling pressure from foreign funds in the stock markets was balanced off by the domestic institutional investors (DIIs) which have been net buyers.

For the week ended Feb 13, the benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) was up 377.02 points or 1.31 percent in the weekly trade.

The barometer index closed at 29,094.93 points, while it had ended trade at 28,717.91 points on Feb 6.

Market insiders point out that the next major trigger for the markets in the coming week will be data on WPI (Wholesale Price Index) based inflation which will be released on Monday.

On Friday, S&P BSE Sensex closed the day’s trade at 29,094.93 points, up 289.83 points or 1.01 percent from the previous day’s close at 28,805.10 points.

Friday was the fourth consecutive session of gains for the barometer index. The benchmark index had gained 867 points in the last four trading sessions. IANS